In 2006, the interest rate of my HDB mortgage loan with UOB was raised three times from 2.6 per cent to 4.1 per cent. Inevitably, the reason given for the increase was the increase in interbank market interest rates. As I noticed that the interbank market interest rate had fallen steadily since last year, I wrote to UOB to request a revision in my mortgage loan rate. However, I was told that the bank was monitoring the situation and that no revision would be made to my loan. Instead, I was offered a new package that required me to pay a conversion fee of $500 and have my loan locked with the bank for a longer period of time.

When interbank market interest rates go up, banks revise our mortgage loan rate upwards almost immediately. However, when interbank market interest rates go down, no revision is made at all. Is this fair?

Yeo Heng Ngi